Third and State

As legislators return to Harrisburg after a far too long vacation, it’s time to take stock of the state of the unfinished budget.

In early July, the General Assembly enacted a budget that took many step forwards. It provided new funding for child care and pre-K education, for K-12 education, for the Pennsylvania System of Higher Education; for those who are intellectually disabled and face long waiting lists to get services; and for those for those who suffer from opioid addiction and mental illness.

For the last few weeks, we have been told a Republican plan to balance the budget was coming, one that would, almost miraculously, come up with more than $2 billion without raising taxes or cutting any public programs simply by transferring “surplus funds” that were “not doing anything” into the General Fund.

We knew and said that this plan was, at best, a one year fix that would not do anything to reduce the long term structural deficit in the state budget. And in the same piece we strongly suspected that it was based on some false assumptions about why there are numerous state special funds and why, at certain points of the year, they run a surplus.

But we were not prepared for what we heard today when the program was revealed and the whole effort was shown to be a sham of Wizard of Oz proportions.

Last November we elected a President who reminds many of us of a cranky uncle who sits at the far end of the Thanksgiving or Christmas table, muttering under his breath about the “damn government” and “wasted taxes” and, quite often, “those people who cause all the trouble.” When you try to engage him in discussion, you find that he has a ready – and extremely simplistic – answer to every question, one that is lacking in any detailed understanding of what government actually does and that assumes that “it’s very simple to do x or y” if not for conniving politicians.

Right now, some Republican members of the House of Representatives in Pennsylvania, with the support of outside advocates, are readying a plan to borrow massively, perhaps up to more than $2 billion, from many of the 100 or so special funds that, along with the General Fund, are part of the state budget. Their justification for doing so is that, at the end of each year, many of these funds have a surplus. So it seems easy enough to shift those surpluses – money they are quick to say is “just sitting there not doing anything” – into the General Fund.

Why is this a bad idea? There are two general reasons.